Guidelines and Regulations for Financial Management in Government Procurement

Guidelines and regulations outlined in the General Financial Rules 2017 and related provisions emphasize integrity, transparency, and fair practices in government procurement processes in India. The rules cover areas such as procurement procedures, integrity codes, debarment provisions, purchase preferences, and mandatory electronic procurement. Adherence to these rules ensures accountability and efficiency in financial management in government operations.

• Financial management
• Government procurement
• Integrity codes
• Debarment provisions
• Purchase preferences

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1. General Financial Rules 2017 Ministry of Finance Department of Expenditure January, 2018 1

2. General Financial Rules 2017 Issued in March, 2017. General provisions to be followed in Government of India (GOI) on financial matters. These are executive instructions. GFRs were first issued in 1947. Revised in 1963 and 2005. Broad procurement rules are covered under GFRs Respective procuring entities may instructions regarding conformity with GFRs (Rule 142) Applicability of GFR issue detail broadly procurement in 2

3. Code of Integrity (Rule 175) Applicable for both the procuring entity and the bidder. Code of Integrity prohibits Making offer, solicitation or acceptance of bribed Any misrepresentation that attempts to mislead Collusion, bid rigging, anti competitive approach Coercion or threat to impair or harm Disclosure of Conflict of Interest (Guidance will be in Manuals) Disclosure of any previous transgression by the bidder Procuring entity may take appropriate measures including debarment of bidder. 3

4. Debarment Provision(Rule 151) Under the Prevention of Corruption Act, 1988; the Indian Penal Code or any other law for the time being in force, debarment of bidder for a period not exceeding three years commencing from the date of debarment (for all Departments) On breach of code of integrity bidder may be debarred from participating in any procurement process undertaken for a period not exceeding two years. The bidder shall not be debarred unless such bidder has been given a reasonable represent against such debarment. opportunity to 4

5. Purchase Preference (Rule 153) MSME Policy 358 reserved items 20% procurement quote within L1+15% and match price of L1 By providing Government may Make mandatory procurement of any goods or services from any category of bidders. Make preference to bidders for promoting locally manufactured goods. through MSE if they a notification, 5

6. Electronic Procurement Mandatory Departments to publish and receive bids through e-procurement. Central Public (CPPP) developed (www.eprocure.gov.in) may be used by procuring entities that do not have their own e-procurement portals. Exemptions National Security Global Tenders for all Ministries/ Procurement Portal NIC by 6

7. Advertisement requirement in Newspapers waived Publication in newspaper and ITJ is no more mandatory Advertisement should be on Central Public Procurement Portal (CPPP) and on GeM. An organisation having its own web site should also publish all its advertised tender enquiries on the web site. No cost of tender document may be charged for tender documents bidders. downloaded by the 7

8. Bid Security (Rule 170) In place Bid Security, procuring entities may require bidders to Declaration. sign the Bid Securing As per the declaration Bidders are suspended from participating in future bidding processes of procuring entity for the period of time specified in the request for bid document if: bidders withdraw or modify their bids, fail to sign the contract or fail to submit a performance security. 8

9. Performance Security Rule 171 5 to 10 % of contract value Unlike contracts of Works and Plants, in case of contracts for goods, the need for the Performance depends on the market conditions and commercial particular kind of goods. Security practice for the 9

10. Relaxation for Startups (Rule 173 (i) The condition of prior turn over and prior experience may be relaxed for Start-ups, subject to meeting of quality & technical specifications and making suitable provisions documents. Startups as defined as DIPP Not more than 5 years old Turnover in any year less than 25 cr Certification that intellectual property in the bidding working for innovation, 10

11. Electronic Reverse Auction (Rule 167) An online real-time purchasing method, which involves presentation by bidders of successively more favorable bids during a scheduled period of time and automatic evaluation of bids; Purchasing through applicable when Detailed description of the subject matter of the procurement is available; There is competitive market CVC Approval in 2003 To be decided at the tender issuing stage itself. reverse auction is 11

12. Two Stage Bidding ( Rule 164) Where it is not possible to formulate details specifications without inputs Rapid Technological advances or market fluctuations or both For research, development or study Bidder is expected to carry out detailed survey and assessment of risks, costs and obligations 12

13. Criteria for evaluation of bids (Rule 173 xi) Price Time Cost of operating, maintaining and repairing ( Total Cost of Lifecycle cost) Environmental characteristics 13

14. Conditions for acceptance of single offer(Rule 173 xx) Due process was followed Qualification criteria not unduly restrictive Rates are reasonable Will be treated as single tender for determining competent authority for acceptance of offer. 14

15. GeM Rule 149: Govt. E-Marketplace (GeM) For Goods and Services Mandatory for procuring entities to procure Goods and Services available on GeM Credentials of vendors shall be verified by GeM authorities. Procuring authority reasonableness of prices. to check the 15

16. GeM Up to Rs.50,000/- through any of the available suppliers on the GeM Above Rs.50,000/- Rs.30,00,000/- having lowest price amongst the available sellers, of at least manufacturers, on GeM (bids may also be called by buyer) Above Rs.30,00,000/- through the supplier having lowest price obtaining bids, using reverse auction tool provided on GeM. and the up to through GeM Seller three different after online mandatorily bidding or 16

17. Energy Efficient Electrical Appliances (Rule 173 xvii) Ministries/Departments appliances shall ensure that they carry the notified threshold or higher Star Rating of the Bureau of Energy Efficiency (BEE). Appliance Threshold Star Rating Split Air conditioners 5 Star (under normal conditions where annual usages are expected to be more than 1000 Hrs) 3 Star (where usage of AC is limited e.g. in conference rooms) Frost Free Refrigerators 4 Star while procuring electrical Ceiling Fans Water Heaters 5 Star 5 Star 17

18. Consultancy Services (Rule 177) Consultancy Services: Any Procurement that is primarily non-physical, project-specific, intellectual or advisory where outcomes/ from one consultant to another. May include management consultants etc. Does not include direct engagement of a retired government servant deliverables would vary consultants, policy 18

19. Retired Government Servant (Para 2.1.6 of Manual) Can be hired as consultant through a competitive process. Should not be engaged against regular vacant posts Can be engaged only for the specific task and for specific consultant. They should be assigned clear output related goals. duration as 19

20. Procurement of IT Projects Should normally be carried out as Procurement services outcomes/deliverables vary from one service provider to another. The IT Projects may include: Bespoke software development; Cloud based services; Composite IT system services of Consultancy 20

21. Quality and Cost Basis Selection (QCBS) Rule 192 Earlier part of Manual issued in 2006 Provisions added weightage to procurement of Consultancy Maximum weightage of quality in QCBS increased from 70 to 80%. to ensure is due Quality given in 21

22. More features of GFR 2017 Definitions added: Works, Goods , Consultating service, Non Consulting service Annual Procurement Plan ( 144 x) Increase in powers Without Quotation: 15K to 25k Purchase Committee: 1 L to 2.5 L Unsolicited bids are not to be accepted (162 ii) No member of TC should report to each other (173 xii) 22

23. Thank you !! 23